Gujarat-based food and edible oils firm Adani Wilmer and Madhya Pradesh-headquartered Ruchi Soya Industries have tied up to form a joint venture company for procurement, marketing, sales, and distribution of products such as soya food, oil seeds, and biodiesel.
The new joint venture (JV) company will cater to domestic food demand and both Adani Wilmer and Ruchi Soya will provide manufacturing support to this JV. The new company hopes to reduce costs across logistics, supply chain management, manpower and distribution.
Through their joint venture, Adani Wilmer, Adani Enterprises, and Wilmer International will hold a stake of 66.66 per cent in the JV company, while Ruchi Soya will hold the rest — 33.34 per cent. A non-binding term sheet has been signed.
The joint venture company will have the exclusive right to originate, market, and distribute finished products of Adani Wilmar and Ruchi Soya in India.
According to the joint statement by the both companies, the proposed integration of Adani Wilmar’s and Ruchi Soya’s downstream businesses will serve as a catalyst for the further expansion of both parties’ product portfolios and allow the joint venture to reach and address the consumer tastes, preferences and aspirations of India’s 1.3 billion consumers.
Singapore-based Wilmar International is the world’s largest palm oil processor and has over 500 manufacturing plants and an extensive distribution network covering China, India, Indonesia and some 50 other countries.
Mumbai-based Ruchi Soya is a listed company in the business of edible oil refining and manufacturing of soya foods. However, securities and commodities market regulator SEBI temporarily restrained the company recently from accessing the securities market as it had formed a cartel to execute trade trades in the castor seeds future market.